BILL ANALYSIS                                                                                                                                                                                                    Ó




           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                       SB 1196|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 


                                UNFINISHED BUSINESS 


          Bill No:  SB 1196
          Author:   Hill (D), et al.
          Amended:  8/19/16  
          Vote:     21 

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  9-0, 4/18/16
           AYES:  Hill, Bates, Berryhill, Block, Galgiani, Hernandez,  
            Jackson, Mendoza, Wieckowski

           SENATE APPROPRIATIONS COMMITTEE:  Senate Rule 28.8

           SENATE FLOOR:  38-0, 5/12/16
           AYES:  Allen, Anderson, Bates, Beall, Berryhill, Block,  
            Cannella, De León, Fuller, Gaines, Galgiani, Glazer, Hall,  
            Hancock, Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson,  
            Lara, Leno, Leyva, McGuire, Mendoza, Mitchell, Monning,  
            Moorlach, Morrell, Nguyen, Nielsen, Pan, Pavley, Roth, Stone,  
            Vidak, Wieckowski, Wolk
           NO VOTE RECORDED:  Liu, Runner

           ASSEMBLY FLOOR:  79-0, 8/30/16 - See last page for vote

           SUBJECT:   Professions and vocations:  Bureau of Real Estate,  
                     Bureau of Real Estate Appraisers, and Bureau of  
                     Security and Investigative Services


          SOURCE:    Author
          
          DIGEST:  This bill subjects the Bureau of Security and  
          Investigative Services (BSIS) to review by the appropriate  
          committees of the Legislature, and makes various changes to  
          provisions in the Alarm Company Act, Locksmith Act, Private  
          Investigator Act, Private Security Services Act, Proprietary  
          Security Services Act, and Collateral Recovery Act to improve  








                                                                    SB 1196  
                                                                    Page  2



          the oversight, enforcement and regulation by the BSIS of  
          licensees under each Act; adds a sunset review date for the  
          Bureau of Real Estate (CalBRE) and Bureau of Real Estate  
          Appraisers (BREA), and makes various changes to provisions in  
          the Real Estate Law and the Real Estate Appraisers' Licensing  
          and Certification Law to improve the oversight, enforcement and  
          regulation by the CalBRE and BREA, and makes other technical  
          changes.  


          Assembly Amendments insert provisions related to BSIS.


          ANALYSIS:   


          Existing law:


           1) Establishes the BSIS within the Department of Consumer  
             Affairs (DCA).  (Business and Professions Code (BPC) §  
             6980.1) with responsibility for administering the Alarm  
             Company Act (BPC § 7590), Locksmith Act (BPC § 6980), Private  
             Investigator Act (BPC § 7512), Private Security Services Act  
             (BPC § 7580), Proprietary Security Services Act (BPC § 7574)  
             and Collateral Recovery Act (BPC § 7500) and oversight for  
             licensees of each Act.
           2) Establishes the Real Estate Law, administered by the CalBRE,  
             within the DCA, to license and regulate real estate  
             salespersons, brokers, and mortgage loan originators.  (BPC §  
             10000, et seq.)  


           3) Provides that the Real Estate Commissioner (Commissioner)  
             may revoke or suspend a real estate license who entered a  
             plea of guilty or nolo contendere to, or was found guilty of,  
             or convicted of, a felony, or a crime substantially related  
             to the qualifications, functions, or duties of a real estate  
             licensee, after the time for appeal has elapsed or the  
             judgment of conviction has been affirmed on appeal.  (BPC §  
             10177(b))









                                                                    SB 1196  
                                                                    Page  3




           4) Establishes the Real Estate Appraiser's Law, administered by  
             the BREA within the DCA, to licenses and regulates real  
             estate appraisers.  (BPC § 11300, et seq.)  


           5) Requires the Commissioner to adopt regulations governing the  
             process and procedures for renewal of a license to include,  
             but not be limited to, continuing education (CE)  
             requirements, which will be reported on the basis of  
             four-year CE cycles.  (BPC § 11360)


          This bill:


           1) Subjects the BSIS to review by the appropriate committees of  
             the Legislature.


           2) Establishes a process by which BSIS will contract with a  
             vendor to offer assessments to determine if an applicant for  
             licensure as an armed security guard is capable of exercising  
             appropriate judgment, restraint and self-control.


           3) Authorizes BSIS authority to seek an emergency order against  
             the holder of a firearms permit if, after the BSIS'  
             investigation upon receipt of arrest information for assault,  
             battery, use of force or violence, or a report from a BSIS  
             approved firearms training facility or a report from the  
             employer that individual is a threat to public safety or if  
             the individual has been determined incapable of exercising  
             appropriate judgment, restraint and self-control.


           4) Requires BSIS to conduct inspections of all firearms  
             training facilities in this state to ensure compliance with  
             applicable BSIS requirements, rules, and regulations.


           5) Ensures due process for firearm permit licensees and  








                                                                    SB 1196  
                                                                    Page  4



             applicants, while also ensuring that a firearms permit is  
             associated with a BSIS license type.


           6) Requires alarm companies to make a specific disclosure to  
             their customers regarding any evergreen clause renewals in  
             their contracts.


           7) Requires both a security guard and his or her employer to  
             submit a written report of any incident involving the  
             discharge of a firearm while on he or she is on duty.


           8) Clarifies that private investigators who wish to carry a  
             concealed firearm must obtain and have on their person while  
             carrying out an investigation, both a BSIS issued firearms  
             permit as well as a Concealed Carry Weapons permit.


           9) Updates the fine and citation structure for violations of  
             provisions in the Alarm Company Act, Private Investigator  
             Act, Private Security Services Act, and Collateral Recovery  
             Act to conform to current practice.


           10)Adds a four year sunset review date to the CalBRE and BREA.


           11)Permits the CalBRE Commissioner to suspend the license of a  
             real estate licensee who has entered into a guilty plea for a  
             felony or a crime substantially related to the  
             qualifications, functions, or duties of a real estate  
             licensee.


           12)Requires the CalBRE to notify person whose license is  
             subject to suspension of his or her right to elect to have  
             the issue of the suspension heard.


           13)Requires that the suspension be rescinded and the license  








                                                                    SB 1196  
                                                                    Page  5



             reinstated to its status prior to the suspension if the plea  
             of guilty is withdrawn by the licensee. 


           14)Requires an applicant for a Real Estate Appraiser's license  
             to complete a BREA-approved course and examination that tests  
             the applicant's knowledge of state and federal laws relating  
             to the practice of appraising.   


           15)Makes other technical changes.  


          Background


          This bill is one of a number of "sunset bills" the Author  
          introduced this year.  Beginning in 2016, the Senate Business  
          and Professions Committee and the Assembly Business and  
          Professions Committee (Committees) conducted joint oversight  
          hearings to review 12 regulatory entities:  The DCA, Acupuncture  
          Board, Board of Behavioral Sciences, California Massage Therapy  
          Association, Court Reporters Board, Board of Pharmacy, Physician  
          Assistant Board, Board of Podiatric Medicine, Bureau of Private  
          Postsecondary Education, Board of Psychology, CalBRE, BREA, and  
          Veterinary Medical Board.  BSIS was reviewed in 2015.  This  
          bill, and the accompanying sunset bills, are intended to  
          implement legislative changes as recommended by staff of the  
          Committees and which are reflected in the background papers  
          prepared by Committee staff for each agency and program reviewed  
          by the Committees for this year.  SB 1196 is necessary to ensure  
          continued oversight of the real estate and appraiser professions  
          by CalBRE and BREA, as well as alarm companies and their  
          employees, locksmiths, private investigators, private security  
          services, proprietary security services, and repossessors by  
          BSIS.  


          CalBRE is the state entity currently charged with responsibility  
          to enforce the Real Estate Law, the Subdivided Lands Act, and  
          the Vacation Ownership and Time-share Act of 2004.  CalBRE's  
          programs are in place to satisfy the Bureau's statutorily  








                                                                    SB 1196  
                                                                    Page  6



          mandated obligations of licensing and regulating salespersons,  
          brokers, mortgage loan originators, real estate and prepaid  
          listing service licensees, reviewing and approving subdivision  
          and time share offerings, and approving CE and pre-license  
          courses.  


          In 1989, Title XI of the federal Financial Institutions Reform,  
          Recovery and Enforcement Act was adopted by congress mandating  
          states to license and certify real estate appraisers who  
          appraise property for federally related transactions.  The  
          federal law was enacted as a result of the savings and loan  
          crisis.  In response to the federal mandate, the California  
          Legislature enacted the Real Estate Appraisers Licensing and  
          Certification Law in 1990 (AB 527, Chapter 491, Statutes of  
          1990).  The Office of Real Estate Appraisers (OREA) was  
          established within the Business, Transportation and Housing  
          Agency, and charged with developing and implementing a real  
          estate appraiser licensing and certification program compliant  
          with the federal mandate.  In 2012, Governor Brown submitted a  
          reorganization plan to the Legislature.  As a result, on July 1,  
          2013, OREA became the BREA within DCA.


          BSIS currently licenses about 380,000 companies and employees  
          serving in the areas of alarm services, locksmith services,  
          private investigation, private security, repossession, and  
          firearm and baton training.  BSIS administers the Alarm Company  
          Act, Locksmith Act, Private Investigator Act, Private Security  
          Services Act, Proprietary Security Services Act and Collateral  
          Recovery Act.


          This bill includes a number of consumer protection and public  
          safety reforms related to the operations of BSIS and ensures  
          that BSIS is reviewed by the appropriate policy committees of  
          the Legislature.  SB 1196 also ensures that CalBRE and BREA are  
          reviewed by the appropriate policy committees of the Legislature  
          in four years (2021).  This bill additionally provides the  
          Commissioner the authority to suspend the license of a real  
          estate licensee who has entered into a guilty plea for a felony  
          or a crime substantially related to the qualifications,  








                                                                    SB 1196  
                                                                    Page  7



          functions, or duties of a real estate license and requires an  
          applicant for a Real Estate Appraiser's license to complete a  
          course and examination that tests the applicant's knowledge of  
          state and federal laws relating to the practice of appraising.  


          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   Yes


          According to the Assembly Appropriations Committee, the  
          provisions related to CalBRE and BREA will result in minor and  
          absorbable costs.  According to information provided by the DCA,  
          the provisions related to BSIS will result in absorbable costs  
          related to firearm training facilities inspections; ongoing  
          costs of $225,000 related to the assessment to determine if an  
          applicant for licensure as an armed security guard is capable of  
          exercising appropriate judgment, restraint and self-control and;  
          onetime costs of approximately $397,000 to implement the  
          assessment and training facility inspection provisions of this  
          bill within the DCA's BreEZe system, costs that are expected to  
          be absorbable within existing resources.


          SUPPORT:   (Verified8/29/16)




          California Association of Licensed Security Agencies, Guards &  
          Associates




          OPPOSITION:   (Verified8/29/16)


          None received


          ARGUMENTS IN SUPPORT:     California Association of Licensed  








                                                                    SB 1196  
                                                                    Page  8



          Security Agencies, Guards & Associates (CALSAGA) writes that  
          this bill makes noteworthy changes to the Private Security  
          Services Act, especially as it pertains to individuals carrying  
          firearms as part of their duties. According to CALSAGA, this  
          bill adds another level of scrutiny to the licensing process  
          which directly results in enhanced public safety for the  
          citizens of California.


           ASSEMBLY FLOOR:  79-0, 8/30/16
           AYES: Achadjian, Alejo, Travis Allen, Arambula, Atkins, Baker,  
            Bigelow, Bloom, Bonilla, Bonta, Brough, Brown, Burke,  
            Calderon, Campos, Chang, Chau, Chávez, Chiu, Chu, Cooley,  
            Cooper, Dababneh, Dahle, Daly, Dodd, Eggman, Frazier, Beth  
            Gaines, Gallagher, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Grove, Hadley, Harper,  
            Roger Hernández, Holden, Irwin, Jones, Jones-Sawyer, Kim,  
            Lackey, Levine, Linder, Lopez, Low, Maienschein, Mathis,  
            Mayes, McCarty, Medina, Melendez, Mullin, Nazarian, Obernolte,  
            O'Donnell, Olsen, Quirk, Ridley-Thomas, Rodriguez, Salas,  
            Santiago, Steinorth, Mark Stone, Thurmond, Ting, Wagner,  
            Waldron, Weber, Wilk, Williams, Wood, Rendon
           NO VOTE RECORDED: Patterson



          Prepared by:Sarah Mason / B., P. & E.D. / (916) 651-4104
          8/30/16 19:58:09


                                   ****  END  ****